In a declaratory judgment action brought by the Kansas East Conference of the United
Methodist Church, Inc., seeking an order dissolving Bethany Medical Center, Inc., the record is
examined and it is held: Under the facts set forth in the opinion, (1) the district court
did not commit
error in refusing to dissolve Bethany Medical Center, Inc., and (2) the district court's order
enjoining
Bethany from amending its articles of incorporation denied Bethany due process, was not
warranted,
and was an abuse of discretion.

Appeal from Wyandotte district court; STEPHEN D. HILL, judge. Opinion filed
December 11, 1998.
Affirmed in part and reversed in part.

Stewart L. Entz, of Entz & Chanay, P.A., of Topeka, argued the cause,
and Jeffrey A. Chanay and
Michael L. Entz, of the same firm, and Kris W. Kobach, of Kansas City,
Missouri, were with him on the briefs for
appellant.

Reid F. Holbrook, of Holbrook, Heaven & Osborn, P.A., of Kansas City,
argued the cause, and Thomas M.
Sutherland, Daniel W. Peters, and Lynaia M. Holsapple, of the
same firm, and Robert T. Stephan, of Lenexa, were
with him on the briefs for appellee/cross-appellant Bethany Medical Center, Inc.

David E. Everson, of Stinson, Mag & Fizzell, P.C., of Kansas City,
Missouri, argued the cause, and
Carrie L. Mulholland, of the same firm, Carla J. Stovall, attorney general,
and John W. Campbell, senior deputy
attorney general, were with him on the brief for appellee State of Kansas.

The opinion of the court was delivered by

ALLEGRUCCI, J.: This is an action for declaratory judgment brought by the Kansas East
Conference of the United Methodist Church, Inc., (the Conference) seeking an order that would
dissolve Bethany Medical Center, Inc., (Bethany) and distribute its assets, which consist primarily
of
the hospital sale proceeds, to the Conference. After a bench trial, the district court entered
judgment
that Bethany should not be dissolved. On cross-claims between Bethany and the State of Kansas,
the
trial court ordered that Bethany use the proceeds to promote and improve the health of the
citizens of
Wyandotte County, Kansas, particularly the indigent. On its own motion, the trial court issued a
permanent injunction prohibiting Bethany from amending its articles of incorporation to remove
the
Conference as the designated recipient of Bethany's assets in the event of its dissolution. The
Conference appealed from the decision permitting Bethany's continued corporate existence and
retention of the sale proceeds. Bethany cross-appealed from imposition of the permanent
injunction.
The case was transferred from the Court of Appeals to this court on the Conference's motion,
pursuant to K.S.A. 20-3017.

In its findings of fact, the district court stated:

"Bethany Medical Center is a not-for-profit charitable corporation, organized, existing, and in
good standing in the
State of Kansas. It is a tax exempt, 501(c)(3) corporation, pursuant to the Internal Revenue Code
of 1954.
Furthermore, it is exempt from payment of real and personal property taxes pursuant to K.S.A.
79-201(b). Bethany is a
general hospital, as contemplated by K.S.A. 65-425(a). It is a health care provider within the
meaning of K.S.A. 40-3401 et seq.

"Bethany is a charitable organization pursuant to the Charitable Organizations and
Solicitations Act
[COSA], K.S.A. 17-1759 et seq., and is an 'institution' as contemplated by the
Uniform Management of Institutional
Funds Act, K.S.A. 58-3601 et seq. Bethany has several for-profit corporate
subsidiaries, all doing business in the State
of Kansas and in good standing. They are Medical Management, Inc., (MMI); Medical
Professionals, Inc., (MPI); and
General Collection Services, Inc., (GCSI).

"The [Conference] is a not-for-profit charitable corporation, duly organized, validly
existing, and in good
standing in the State of Kansas. It is also a charitable organization as contemplated by COSA.

"On July 28, 1997, Bethany executed an asset purchase agreement with Galen [of Kansas,
Inc.,] wherein
Bethany agreed to convey most of its assets to Galen in return for a cash payment and assumption
of certain liabilities
by Galen. Bethany will retain cash and other marketable securities. It is estimated now that their
value will be
somewhere between $40-45,000,000. That figure is subject to final calculations and adjustments
and the satisfaction of
certain debts and obligations that Bethany has, including some industrial revenue bonds to Kansas
City, Kansas.

"This court found, on September 26, 1997, that it was an economic necessity for Bethany
to enter into the
sale."

Following the trial court's decision that the hospital should be sold, the sale took place. It
is not challenged on appeal.

The trial court also detailed the historical relationship between Bethany and the
Conference. According to the district court's account, the 1892 charter of Bethany declares that
its
medical purpose is

"'to nurse and furnish medical treatment for the sick and wounded . . . and for that purpose to
rent, build and maintain,
in or near Kansas City, Wyandotte County, Kansas, a hospital in which indigent patients may be
treated and nursed,
under such rules and conditions as the Board of Directors may prescribe; but pay may be accepted
from such persons as
may be able and willing to render the same, and all receipts from that source shall be expended for
the use and benefit
of the hospital . . . .'"

Charitable contributions to support the operation of the hospital were solicited by Bethany, by
a
charitable foundation Bethany formed for the purpose of soliciting contributions, by the Bethany
auxiliary, and by the Methodist church. "Bethany was not created for the benefit of the Methodist
Church, but was one of its missions."

Until 1972, the Conference elected a majority of the trustees to Bethany's Board of
Trustees (Board). In 1972, Bethany's articles of incorporation were amended to provide that 12 of
the 15 Board members should be elected by the outgoing Board and confirmed by the
Conference.
"The Kansas City District Superintendent of the Conference was designated by title to be a
member of
the Bethany Board."

As the result of litigation which concluded in 1979 with the California Conference of the
Methodist Church being held accountable for the activities of a Methodist-related retirement
facility,
the Conference became concerned about being held liable for Bethany's activities. The Conference
referred the question of legal separation from Bethany to a study committee. At the
recommendation
of the study committee, Bethany's articles of incorporation were changed to erect a wall between
it
and the Conference: The requirement that Bethany's Board be confirmed and ratified by the
Conference was deleted; the Conference's right to veto nominations for Bethany's Board was
deleted; and the condition that Bethany's articles of incorporation and amendments to them were
not
effective until ratified by a majority of the Conference at its annual conference was lifted.

In time, the Conference put more distance between itself and Bethany, as is reflected in the
following excerpt from the 1983 journal of the Conference:

"'Bethany Medical Center, Inc., Kansas City, Kansas, [and others] . . . [are] wholly
independent institutions from the
Kansas East Annual Conference. The Annual Conference shall not elect or approve the entire
Board of Trustees though
it may from time to time elect less than a majority of its Trustees or send Conference visitors. The
Annual Conference
shall not monitor, supervise, or, otherwise, review any of the affairs or operations of these
institutions. The Annual
Conference may, from time to time, provide financial support to any of these institutions as a
contribution. The Annual
Conference shall have no legal responsibility for any of these institutions.'"

The Conference has donated no money to Bethany since 1975. In July 1980, the Conference
passed
along to Bethany two contribution checks totalling $25.

Bethany's revenues for the year ending September 30, 1996, exceeded $73 million.

Bethany's current articles of incorporation permit its Board to amend them without
restriction. It also provides: "Upon dissolution of the Corporation and after payment of just debts
and
liabilities, all remaining assets shall be distributed to the Kansas City East Conference of the
United
Methodist Church . . . ."

Bethany's corporate purpose is stated as follows in the current articles of incorporation:

"a. To establish and maintain an institution within or without the state where incorporated,
with
permanent facilities that include inpatient beds and medical services to provide diagnosis and
treatment for patient and
associated services such as, but not limited to, extended care, outpatient care, and home care;

"b. To carry on any education activities related to rendering care to the sick and injured,
or to the
promotion of health that, in the opinion of the Board of Trustees of Bethany Medical Center may
be justified by the
facilities, personnel, funds, and other requirements that are, or can be, made available;

"c. To promote and carry on scientific research related to the care of the sick and injured
insofar as, in the
opinion of the Board of Trustees of Bethany Medical Center, such research can be carried on, in,
or in connection with
the hospital; and,

"d. To promote and participate, so far as circumstances may warrant, in any activity
designed and carried
on to promote the general health of the community."

With regard to the sale of Bethany, the district court stated the following:

"Under the purchase agreement, Bethany has continuing rights and obligations. It has the
right to enforce
agreements with Galen to continue the operation of the hospital for at least three years after
closing, and to continue
Bethany's indigent care policies for so long as Galen operates an acute care hospital in Wyandotte
County, and they
have certain rights of first refusal and repurchase options with respect to the hospital for a period
of five years."

The trial court's final judgment consisted of three rulings:

(1) On the Conference's petition for declaratory judgment, the trial court refused to order
dissolution of Bethany and, thus, permitted Bethany to retain the proceeds of the sale.

(2) On the cross-claims of Bethany and the State, the trial court decided that Bethany's
use of the proceeds is restricted to improving the health of Wyandotte County citizens,
particularly
indigent ones.

(3) On its own initiative, the trial court permanently enjoined Bethany from displacing the
Conference as the recipient of Bethany's assets in the event of its dissolution.

The Conference appeals the first ruling; Bethany cross-appeals the third ruling. We first
consider the issue raised in the Conference's direct appeal.

The district court described the arguments made by the Conference and Bethany as being
like ships, on two completely separate courses, passing in the night. The Conference would have
had
the trial court apply trust law, and Bethany relied on corporate law. The trial court expressly
concluded that the law of corporations governs the question. On appeal, the Conference persists
in its
advocacy of trust law as governing this issue but gives no reasons why trust law rather than
corporate
law ought to be applied. Instead, the Conference devotes nearly all the argument section of its
brief to
convincing this court that proper application of trust law will lead to reversal of the judgment.

The Conference states what it seeks on appeal: "[T]he Conference respectfully submits
that the decision below must be reversed, and that the Conference be found entitled to all of
Bethany's assets." What the Conference centers its argument on, however, is not entitlement to
the
sale proceeds. Instead, it focuses on the trial court's imposing restrictions on
Bethany's use of the
proceeds. The restrictions, which were imposed in the trial court's ruling on the cross-claims
between
Bethany and the State, were not a subject of the Conference's petition for declaratory
judgment, nor
do they affect the Conference, nor are they even at issue on appeal. The theory behind the
Conference's focusing on an extraneous question seems to be, at least in part, to invoke principles
of
trust law with regard to the restrictions and then seamlessly turn them toward the question of
entitlement to the sale proceeds. In this regard, the Conference broadly states that the trial court
"correctly observed that the law and principles of charitable trusts govern the
disposition of Bethany's
assets." (Emphasis added.) The Conference then quotes a portion of the journal entry that pertains
to
the question of restrictions, not the question of entitlement.

The Conference does not address why corporate law, which was applied by the trial court,
does not control. The district court found that Bethany is a not-for-profit, charitable corporation,
organized, existing, and in good standing in the state of Kansas. It further found that Bethany is a
charitable organization pursuant to the Charitable Organizations and Solicitations Act (COSA),
K.S.A. 17-1759 et seq., The subject of Chapter 17 of the Kansas statutes is
corporations, and Article
17 of the corporations chapter contains provisions specific to religious, charitable, and other
organizations. K.S.A. 17-1701 to 17-1775. Articles 60 through 77 constitute the general
corporation
code. K.S.A. 17-6001 provides, in part: "[A]ny corporation organized under the laws of this state
or
authorized to do business in this state shall be governed by the applicable provisions of this code."
Thus, as a charitable corporation organized under the laws of Kansas, Bethany is governed by the
Kansas Corporation Code.

The Conference directs the court's attention to Restatement (Second) of Trusts 348
Comment f (1957) as authority for applying the same rules to charitable trusts and charitable
corporations. What the Comment actually states is that some of the rules applicable to charitable
trusts are applicable as well to charitable corporations and some are not. In any event, the
Comment
has little or no relation to the circumstances of the present case because the Comment (and the
Restatement section) contemplates a settlor or donor manifesting an intention to create a
charitable
trust and devoting property to accomplish the charitable purpose. Bethany's history is replete with
charitable giving, but it does not include the particular elements of a charitable trust,
as defined in
348. According to the Conference, Bethany was founded in 1892 by five Methodists as a part of
"the
Methodist hospitalization movement," it was incorporated the same year, "[t]he Conference was
the
initial sponsor of the hospital," the Conference "was a conduit through which individuals attending
Methodist Churches in eastern Kansas could donate funds to help fulfill Bethany's mission," and
"[c]ountless donors, individual and corporate, have donated money throughout the years to the
[Conference] for Bethany."

What the Conference seeks to convey to the court is that it is or is like a donor or settlor
with the legal authority to reclaim its gift once the specified use is accomplished or obsolete.
There is
nothing in the record, however, to substantiate that construct. This is not a case in which a donor
put
money in a trust to be used for the creation and financial support of a hospital. Instead, it is a case
where five Methodists incorporated in 1892 for the purpose of providing medical care in
Wyandotte
County, solicited charitable contributions, formed a foundation to solicit contributions, and
accepted
contributions from the Methodist church. Over the years, the Conference has been closely
associated
with Bethany and has been a significant benefactor, but there is no evidence of its acting as a trust
settlor. Because Bethany is a corporate entity and held the title, Galen purchased the hospital from
and paid Bethany for it. The theory which the Conference has formulated for its entitlement to the
sale proceeds, therefore, involves disqualifying the Bethany corporation. The Conference seeks to
do
so on the ground that Bethany can no longer fulfill its purpose, which in the Conference's
construct is
synonymous with the donor's intent. There is no factual basis for what the Conference proposes,
and,
in addition, dissolution of Bethany is governed by the corporate statutes.

The Conference wants the hospital sale proceeds, which are held by the Bethany
corporation. Thus, the Conference's theoretical entitlement to the proceeds depends upon
Bethany's
corporate dissolution. Corporate dissolution is governed by provisions of the corporation code,
not
by trust principles. The Conference seeks dissolution of Bethany, not just a declaration of legal
rights.

The Conference also argues that a corporation must have a purpose and is prohibited from
conducting any activity outside its stated purpose. The Conference quotes from the journal entry
to
show that the parties agreed and the district court found that Bethany's primary
purpose had been to
operate a hospital. In selling the hospital to Galen, the Conference argues, Bethany "contracted
away
its purpose." Bethany is forbidden by law to substitute other activities, and, therefore, the
argument
continues, the corporation must be dissolved. The Conference relies on Bankers' Union v.
Crawford,
67 Kan. 449, 73 Pac. 79 (1903), and Attorney General v. Hahnemann Hospital, 397
Mass. 820, 494
N.E.2d 1011 (1986).

The Kansas case turns on the peculiarities of fraternal benefit societies. Statutory and
practical constraints on the charitable organizations involved in the present case are not
comparable
to those that controlled the activities of the fraternal benefit societies. It is clearly distinguishable
on
its facts, and it has no precedential value in the present case.

The Massachusetts case, like the present one, involved the sale of a hospital, which was
operated by a charitable corporation, to a for-profit corporation. The Massachusetts court stated:

"The Attorney General argues that Hahnemann's abandonment of its sole activity is, in effect,
a dissolution requiring
compliance with the 11A procedures. Hahnemann responds that it does not intend to close its
affairs, but instead will
become a grant-making institution in accordance with its newly amended corporate purposes.

"There can be little doubt that, in the absence of amendment of its purposes, the
abandonment by
Hahnemann of the sole activity authorized by its articles of organization--maintaining a
hospital--would render
Hahnemann an empty shell, unable to fulfil its purposes. [Citation omitted.] In that instance, a
dissolution proceeding
under 11A would be required.

"In this case, however, Hahnemann has amended its articles of organization to include
'[e]stablishing,
maintaining, and supporting a charitable hospital or hospitals,' and 'a convalescent home or
homes,' and
'[p]articipating in any activity that promotes the health of the general public.' Hahnemann
represents that it intends to
function as a grant-making institution to fulfil these purposes. There is no suggestion that the
amendments are invalid
or that the newly stated purposes are unattainable. Hahnemann is not winding up its affairs, and
need not do so as a
matter of law." 397 Mass. at 833.

In the present case, Bethany's primary purpose was operating a hospital, but operating a
hospital was
not its sole activity. Even if it had been Bethany's sole activity, however, the lesson from
Hahnemann
would be that the effect of the sale on Bethany is governed by the corporation code.

Hahnemann is an instructive case in other respects. In 1892, Hahnemann was
organized as
a nonprofit, charitable corporation for the purpose of establishing and maintaining a hospital in
accordance with the principles of homeopathy. When a hospital finally was built, more than 40
years
later, the funds were supplied by an inter vivos charitable trust established by Mary Ida Converse
for
the support of a homeopathic hospital. Subsequent operation of the hospital relied on
contributions
from the Converse trust income, and on three occasions the trust instrument was amended to
provide
payments out of trust principal for "maintenance, operation, expansion, and modernization." 397
Mass. at 824. Thus, the issues presented by Hahnemann's sale "require[d] a detailed examination
of
the relationship between the terms of the Converse trust and the articles of organization of the
Hahnemann corporation." 397 Mass. at 825. In Hahnemann, the money that made
realization of the
corporate objective possible was supplied by an independent charitable trust, the provisions of the
trust instrument had been incorporated into the corporation's by-laws, and trust principles were
taken
into consideration by the Massachusetts court. It concluded that the proposed hospital sale would
not
necessitate dissolution where the corporate articles had been amended to create new corporate
purposes. In the present case, there is no independent charitable trust. Nonetheless, the
Conference
would have this court apply trust principles and conclude that the hospital sale necessitated
dissolution where the corporate articles, without amendment, included other corporate purposes.
The
comparison of Hahnemann and the present case undermines rather than enhances the
Conference's
position.

The Conference's claim to the sale proceeds depends on Bethany's dissolution. As the
district court stated, "[c]orporations are creatures of statute" that "are born and die through an
operation of law." K.S.A. 17-6805(a) provides that the method and proceedings for the
dissolution of
a corporation such as Bethany that has no capital stock "shall conform as nearly as may be
possible to
the proceedings prescribed by K.S.A. 17-6804, and amendments thereto, for the dissolution of
corporations having capital stock." In order to accomplish dissolution, a majority of the members
of
the governing body adopt a resolution to dissolve the corporation, and a certificate of dissolution
is
filed with the Secretary of State. The Secretary of State issues its own certificate. When that
certificate is recorded in the office of the register of deeds of the county in which the corporation
maintained its registered office, the corporation is dissolved. K.S.A. 17-6804(b). None of the
steps in
this process has been undertaken by Bethany.

In the absence of any inclination on the part of Bethany's Board to dissolve the
corporation, the Conference sought to have the district court intervene to judicially dissolve the
corporation and distribute its assets--the proceeds from the hospital sale. Neither the Kansas case
nor
the Massachusetts case relied on by the Conference supports its desired result.

Bethany cites Cron v. Tanner, 171 Kan. 57, 229 P.2d 1008 (1951), in which a
minority
shareholder sought a writ of mandamus against the officers and directors of a banking corporation
to
compel retirement of certain stock, payment of a dividend on other stock, and repayment of a
dividend and salary to a certain officer. Although Cron did not seek to have the court intervene to
dissolve the corporation, the court made the following general observations:

"It is well settled that the directors of a corporation are charged with the duty of managing
its affairs and
only in cases of the greatest emergency are courts warranted in interfering with the internal
operation of its affairs. It
has been said that the fundamental principle of a corporation is that a majority of its stockholders
have the right to
manage its affairs so long as they keep within their charter and no principle of law is more firmly
fixed in our
jurisprudence than the one which declares that courts will not interfere in matters involving merely
the judgment of the
majority in exercising control over corporate affairs. (Feess v. Bank, 84 Kan. 828,
115 Pac. 563, LRA 1915A, 606;
Beard v. Achenbach Memorial Hospital Ass'n, 170 Fed. 2d 859.)" 171 Kan. at 62.

Bethany also cites Feess v. Bank, 84 Kan. 828, 115 Pac. 563 (1911), which
this court
relied on in Cron and the trial court relied on in the present case. Feess
also involved a bank and a
complaining minority shareholder. On an ex parte application and without notice to
other
stockholders and the directors, the trial court appointed a receiver, placed possession of the assets
and business of the bank in him, and ordered him to wind up the bank's affairs, "thus practically
end[ing] its corporate existence." 84 Kan. at 834. Following a discussion in which the lack of
notice
was disapproved, the court added that "the appointment that was made would not have been
justified
even if notice had been given." 84 Kan. at 834. The court's observations continued:

"The court was without authority to make the order, and indeed there was no application for
such an order in the
petition on which the order was granted. There is nothing in the statute which authorizes a court
of equity to dissolve a
corporation, or wind up its affairs, at the instance of a minority stockholder, and in the absence of
express statutory
authority it can not be done. For certain reasons and by certain methods the bank commissioner is
authorized to have a
receiver appointed and to wind up the affairs and business of a bank. (Laws 1908, ch. 14, §
1, Gen. Stat. 1909, § 487.)
A corporation may be dissolved, its franchise taken away, its affairs wound up and its property
distributed in an action
brought by the state through its proper officer, but a court of equity can not interpose its authority
to forfeit the
franchise of a corporation, wind up its affairs or otherwise end its corporate existence at the
instance of a stockholder."
84 Kan. at 834-35.

Bethany states that the three circumstances which warrant a court's intervening to dissolve
a corporation are set out in K.S.A. 17-6812(a) (abuse or nonuse of corporate powers), K.S.A.
17-6804(d) (deadlock of two stockholder corporations), and K.S.A. 17-6901 (insolvency). None
of these
circumstances exists in the present case.

It is not a question of a lack of judicial authority so much as whether circumstances
warrant dissolution of Bethany. The Conference insists that Bethany has no purpose now that the
hospital has been sold and that the lack of purpose requires dissolution of the corporation. As we
have seen, however, operating a hospital was the primary purpose, but only one of several
health-care
related purposes pursued by Bethany. Sale of the hospital, therefore, did not drain the corporation
of
purpose.

Within the context of its corporate purpose argument, the Conference contends not only
that the sole purpose of Bethany was to operate the hospital but also that the district court
erroneously applied the Uniform Management of Institutional Funds Act (UMIFA), K.S.A.
58-3601
et seq., to alter that purpose. The district court invoked UMIFA, not to change the
corporate purpose
but, rather, to release any restrictions that may have been placed by donors on contributions
Bethany
has received during the many years of its existence. Although the Conference takes the position
that it
is the donor that funded Bethany's activities, the record shows and the district court determined
that
the Conference was a conduit for contributions from many sources, including Methodist
churchgoers,
rather than the donor. The district court made no specific finding or findings about restricted
donations; it simply invoked UMIFA to transform any restrictions there might have been that
were
rendered obsolete by the sale of the hospital. Even assuming for the purpose of argument that
there
were contributors who restricted donations they made to Bethany, those individually restricted
donations are not to be confused with the purpose of the charitable corporation of Bethany. Thus,
the
district court's application of UMIFA is not relevant to the question of whether Bethany or the
Conference should receive the proceeds of the sale. The district court correctly refused to dissolve
Bethany and distribute its assets to the Conference.

We next turn to the issue raised in the cross-appeal: Did the district court abuse its
discretion in permanently enjoining Bethany from amending its articles of incorporation to remove
designation of the Conference as recipient of Bethany's assets upon its dissolution? The granting
of
injunctive relief involves the exercise of judicial discretion and will be reviewed by this court for
abuse
of discretion. South Shore Homes Ass'n v. Holland Holiday's, 219 Kan. 744, 751,
549 P.2d 1035
(1976). A party that asserts abuse of discretion bears the burden of showing it. State v.
Harris, 262
Kan. 778, 785, 942 P.2d 31 (1997). Here, Bethany asserts that the district court abused its
discretion
and, in doing so, violated Bethany's constitutional right to due process. In this circumstance, it has
been said that

"there is a greater need for articulation by the trial judge of the reasons for his 'discretionary'
decision. Discretion must
be exercised, not in opposition to, but in accordance with, established principles of law. It is not
an arbitrary power. In
its practical application in this state, judicial discretion is substantially synonymous with judicial
power." Saucedo v.
Winger, 252 Kan. 718, 731-32, 850 P.2d 908 (1993).

The injunction in this case was entered by the trial court on its own initiative. The final
two paragraphs of the journal entry state the trial court's reasons:

"Furthermore, this court is not convinced that Bethany should be allowed to amend its
[articles of
incorporation] to delete the [Conference] as the resultant beneficiary upon the dissolution of the
corporation. This court
believes this for two reasons. First, one cannot ignore eighty years of history. Without the
[Conference] there would be
no Bethany Hospital today. Countless donors, individual and corporate, have donated money
throughout the years to
the [Conference] for Bethany. During its corporate infancy, the [Conference] shielded and
nurtured the hospital
through good and bad times. Their gifts have made Bethany possible and should continue to be
used for health care.

"Secondly, it must be assumed that the gifts made to Bethany [through] the [Conference]
were made with
the implied knowledge that in the event that Bethany dissolved, all of the net assets would revert
to the [Conference].
See Bogert, Trusts & Trustees 362. This is especially true of gifts made prior to 1982. Since
there is no way to
determine what portion of Bethany's assets were created through such gifts, the [Conference]
should continue to be the
reversionary beneficiary of Bethany's assets upon the event of its dissolution."

Bethany first contends that imposition of the injunction violated its due process right to
notice and a hearing. It is axiomatic that the "[b]asic elements of procedural due process of law
are
notice and an opportunity to be heard at a meaningful time and in a meaningful manner." In
re
Marriage of Soden, 251 Kan. 225, Syl. 4, 834 P.2d 358 (1992). In the present case, there
is no
dispute that the Conference did not petition the trial court for an injunction, the trial court did not
advise the parties that it was contemplating imposing an injunction, and the trial court did not hear
any evidence on the question. Bethany had neither notice nor opportunity to be heard before the
injunction was imposed. The sum of these factors equals a denial of due process.

The 5th and 14th Amendments to the United States Constitution guarantee that no person
shall be deprived of life, liberty, or property without due process. The Conference argues that
Bethany had no protected interest that would require notice and an opportunity to be heard. The
Conference cites Board of Regents v. Roth, 408 U.S. 564, 33 L. Ed. 2d 548, 92 S.
Ct. 2701 (1972),
for the proposition that only definite liberty or property interests are protected. Roth
was a first-year,
untenured college teacher who challenged the decision not to rehire him for the next academic
year.
The Supreme Court held that Roth had no interest protected by due process. However, with
regard to
property interests, the Supreme Court stated:

"Property interests, of course, are not created by the Constitution. Rather, they are created
and their
dimensions are defined by existing rules or understandings that stem from an independent source
such as state law--rules or understandings that secure certain benefits and that support claims of
entitlement to those benefits." 408 U.S. at
577.

In the present case, Bethany argues that its property interest was created by the Kansas
Corporation Code and that the dimensions of the interest include controlling the operations of the
corporation and having freedom to alienate its property upon dissolution. K.S.A. 17-6301(a)
provides
that a corporation "shall be managed" by its board of directors, and K.S.A. 17-6805a provides:

"Notwithstanding any provision of law or the articles of incorporation, the articles of
incorporation of each
nonprofit corporation that qualifies otherwise for an exemption under section 501(c)(3) of the
internal revenue code of
1954, as amended (26 U.S.C. § 501(c)(3)), shall be considered to contain the following
provision:

"Upon the dissolution of the corporation, the board of directors or governing body of the
corporation, after
paying or providing for the payment of all liabilities of the corporation, shall dispose of all the
assets of the corporation
exclusively: (1) In accordance with the purposes of the corporation, in the manner determined by
the board of directors
or governing body, or (2) to organizations qualified for exemption under section 501(c)(3) of the
internal revenue code
of 1954, as amended (26 U.S.C. § 501(c)(3)), and specified by the board of directors or
governing body. Any assets of
the corporation not so disposed of shall be disposed of by the district court of the county where
the principal office of
the corporation is then located, exclusively for the purposes or to the organizations provided
above, as determined by
the court."

The statutes, in particular 17-6805a, seem to create a definite property interest in the
corporation's
governing body's determining how the corporate assets are to be distributed. That statutorily
created
interest is in sharp contrast with the terms of Roth's appointment, which "secured absolutely no
interest in re-employment for the next year." 408 U.S. at 578. Bethany has a property interest
sufficient to require that it be given notice and a hearing before it could be deprived of the right to
determine disposition of its assets. "It has been settled for almost a century that corporations are
persons within the meaning of the Fourteenth Amendment. Santa Clara County v. Southern
Pacific
R. Co., 118 U.S. 394[, 30 L. Ed. 118, 6 S. Ct. 1132] (1886)." First National Bank of
Boston v.
Bellotti, 435 U.S. 765, 780 n.15, 55 L. Ed. 2d 707, 98 S. Ct. 1407 (1978).

The Conference argues:

"Bethany should have been aware of the possibility that the trial court would enjoin it from
amending its [articles of
incorporation] so as to remove the Conference as the recipient of its corporate assets upon
dissolution. A portion of
those assets are the very subject of this litigation, and it was entirely reasonable and predictable
that the trial court
would seek to preserve the rights and interests of the parties pending appeal."

In this regard, the Conference relies on Penthouse Intern., LTD. v. Barnes,
792 F.2d 943,
950 (9th Cir. 1986). To take advantage of some serendipitous publicity, Penthouse magazine
wanted
to republish photographs of Barnes, using her name rather than the pseudonym under which they
originally appeared. In the magazine's declaratory judgment action, Barnes raised affirmative
defenses
and sought injunctive relief in her counterclaim; thus, Penthouse was aware of the possibility and
had
an opportunity to be heard on the issue of a mandatory injunction against publication using
Barnes'
name. The appellate court affirmed that part of the judgment in which the district court ordered
the
magazine not to republish the photographs using Barnes' name. The appellate court vacated the
order
prohibiting the magazine from publishing the photographs at all because the district court had
heard
no evidence on the subject. The lessons from Penthouse are two sides of the same
coin--where an
enjoined party has had notice and an opportunity to be heard on the question of injunctive relief, it
may be included in a declaratory judgment and vice versa. Thus, it offers no support
for the
Conference's position. The Conference asserts that Bethany should have anticipated an injunction
because the corporate assets were the subject of the litigation. The argument, however, fails to
take
into account that the relief was unrequested and unbriefed and was not the subject of an
evidentiary
hearing; therefore, it was reasonably unforeseen.

The Conference also argues that the trial court had statutory authority in K.S.A. 60-901
for its sua sponte imposition of a permanent injunction as one aspect of the relief
granted in the final
judgment. Although K.S.A. 60-905(a) requires notice and an opportunity to be heard before
imposition of a temporary injunction, the Conference's argument continues, 60-901
does not have
similar requirements for permanent injunctions. K.S.A. 60-903 provides that a
restraining order may
issue upon ex parte application, but that the application "shall also be considered as an application
for
a temporary injunction" and that the restraining "order shall remain in force until the hearing on
the
application for a temporary injunction." K.S.A. 60-905(a) provides that "[n]o temporary
injunction
shall be granted until after reasonable notice to the party to be enjoined and an opportunity to be
heard." There is no section that provides procedure for a permanent injunction, but we know from
60-901 that an injunction may be the final judgment in an action. In this three-tiered scheme, an
application for injunctive relief inevitably will result in notice and an opportunity to be heard
before a
temporary injunction may be imposed and, therefore, certainly before a permanent injunction
would
be ordered. Thus, the absence of express statutory requirements for notice and hearing simply
reflects
the absence of a need to spell out requirements that ought to be fulfilled during the orderly
processing
of the case as a whole. In the present case, there was no application for injunctive relief, and the
possibility of injunctive relief was not considered in the ordinary course of the proceedings. The
statutory scheme was bypassed by the trial court's sua sponte imposing an injunction
as a part of the
final judgment. Contrary to the Conference's contention, the statutes do not authorize issuance of
a
permanent injunction without notice to or opportunity for the enjoined party to be heard. In
addition,
the Conference's argument ignores the constitutional requirement of notice and an opportunity to
be
heard.

In the present case, the trial court stated that its authority for issuing the injunction on its
own initiative lay in the declaratory judgment statutes. In K.S.A. 60-1701, K.S.A. 60-1704, and
K.S.A. 60-1707 the trial court found "authority and obligation . . . to remove any
uncertainty that the
[Conference] and Bethany might have with respect to gifts made to Bethany through the
Methodist
Church prior to their 'separation.'" Examination of those provisions reveals no authority for the
trial
court's acting on its own initiative without notice to the parties and without affording an
opportunity
for the enjoined party to be heard. Bethany suggests that the trial court should have looked to
K.S.A.
60-1703, which provides:

"Further relief based on a declaratory judgment may be granted whenever necessary or
proper. The
application shall be by petition to a court having jurisdiction to grant the relief. If the
application is sufficient, the
court, on reasonable notice, shall require any adverse party whose rights have been
adjudicated by the declaratory
judgment, to show cause why further relief should not be granted." (Emphasis
added.)

It may be noted that the federal counterpart to K.S.A. 60-1703, 28 U.S.C. 2202 (1994), was
cited
by the Ninth Circuit Court of Appeals in Penthouse as the source of authority for the
trial court's
enjoining the publication from using Barnes' name.

Bethany cites Sampel v. Balbernie, 20 Kan. App. 2d 527, 530-31, 889 P.2d
804 (1995),
for the proposition that the party seeking injunctive relief has the burden of showing (1) a
reasonable
probability of irreparable injury, (2) an inadequate remedy at law, (3) relative hardship greater for
the
movant than for the adversary, and (4) compatibility with public interest. In Sampel,
the Court of
Appeals relied on Mid-America Pipeline Co. v. Wietharn, 246 Kan. 238, 242, 787
P.2d 716 (1990).
Taken together, these cases teach that injunctive relief is equitable in nature and that a substantial
showing is required before a court is warranted in ordering a party to do or refrain from doing a
certain act. With the trial court's including an injunction in the journal entry of judgment in the
present case without notice to the parties, there was no opportunity for introduction of evidence
for
or against it. On cross-appeal, Bethany contends that the record lacks sufficient evidence on the
factors identified in Sampel and Mid-America Pipeline. We agree.

Finally, Bethany argues that the injunction is contrary to public interest in two ways. First,
it usurps the power granted to the corporation's Board by the legislature. Second, it "deprives the
citizens of Wyandotte County of charitable funds meant for their benefit." The second contention
is a
hollow one. Without the injunction, Bethany could designate a recipient that would spend the
assets
outside the county. The Conference contends that the injunction protects public interest by
ensuring
that the charitable corporation honors the intent of its benefactor. As we have seen, though, the
"donor's intent" that seems so obvious to the Conference is not substantiated in the record. It is
apparent that the Conference wants control of the proceeds from the hospital sale, but
there is no
evidence from which it reasonably may be inferred that contributions were made with the intent
that
they would be returned if Bethany's operation of a hospital became impracticable.

The resolution of Bethany's cross-appeal is affected by our decision in the direct appeal by
the Conference. We have approved the district court's refusal to dissolve Bethany, ruling that a
corporation is a creation of statute and dissolution is controlled by the Kansas Corporation Code.
Notwithstanding that ruling, the district court proceeded to control the future operation of
Bethany
by enjoining it from amending its articles of incorporation. In our earlier discussion affirming the
trial
court's refusal to dissolve Bethany, we quoted from Cron v. Tanner, 171 Kan. at 62,
the well-settled
rule that absent "the greatest emergency," courts are not warranted in interfering with the internal
operation of a corporation. We further noted in Cron the absence of the statutory
requirements that
warrant a court's intervening to dissolve a corporation. Here, as in Cron, we are
asked to approve a
district court's acting as a court of equity to substitute its judgment for that of the officers or
board of
directors of a corporation. In Cron, we denied such a request by responding:

"It is not the function of the court to manage a corporation nor substitute its own judgment
for that of the officers
thereof. It is only when the officers are guilty of willful abuse of their discretionary power or of
bad faith, neglect of
duty, perversion of the corporate purpose, or when fraud or breach of trust are involved, that the
courts will interfere."
171 Kan. at 64.

Here, the district court interfered in the internal affairs of Bethany by enjoining it from
amending its articles of incorporation as to the distribution of its assets upon dissolution. Based
upon
the factual record in this case, the district court's order so enjoining Bethany was a denial of due
process, not warranted, and constituted an abuse of discretion. We affirm the district court's order
refusing to dissolve Bethany and reverse its order enjoining Bethany from amending its articles of
incorporation.

The judgment of the district court is affirmed in part and reversed in part.